London housing crisis: the Islington solution

"Hammersmith and Fulham shows us which way Tories are heading, and Islington might be pointing the way for Labour," said a respected London Labour figure to me the other day. It was a reference to the borough's alternative to the coalition's "affordable rent" model, whereby registered social landlords will "be expected" to deliver homes with rents set at up to 80 percent of the going rate in the local private sector in order to secure a bit of grant through the Homes and Communities Agency.

Islington believes that rents set at such high levels would do little to solve the biggest problem facing tenants in the borough's social rented homes - overcrowding. James Murray, Islington's executive member for housing, tells me there are some 3,000 overcrowded households at the moment, around 350 of them severely so - meaning they are at least two bedrooms short of what they need.

With 40 percent of their social housing stock being one-bedroom accommodation, Islington needs more family homes that are genuinely affordable for families in their expensive borough. Their solution involves supplying housing associations with council-owned land either free or at a discount, in the expectation that the homes built on it were for social rent, which in Islington is set at 30-35 percent of market levels. The Islington Tribune has reported that this is around £340 a week for a three-bedroom house.

New model "affordable" rents, even if set nearer to 60 percent of local market rates than 80 percent, would be either beyond the financial reach of those who need them or so much more expensive than where they presently live they might prefer to put up with what they have. Those on housing and other benefits would be at risk of being priced out by forthcoming caps.

The land could come from a variety of sources: new homes are planned to be included on the site of a rebuilt primary school, in the City Road Basin redevelopment, and some disused council offices off the Caledonian Road. Murray wrote at Red Brick that some 500 new homes could be delivered under their scheme, and possibly "several hundred more."

Family Mosiac has expressed interest in working with Islington on the terms offered, and Murray says he's confident of finding the four or five partners he needs. In his Red Brick article he wrote:

Our model will not be appropriate for all London boroughs - just as the "Affordable Rent" model is not appropriate for Islington. But although it is self-evident that our position is outside the government's main programme, we are committed to working with willing housing associations to make this work for them and for those in our borough with the most acute housing need.

As yet, no other borough has followed suit - publicly, at least. Are they thinking about it? Could the Islington solution catch on?